My Jars - an Update

Jason from Canadian Savings  asked me a couple of great questions on my recent payday post that relate to how I use the jar system.


Question One: How long do the jar amounts have to last you?
I budget bi-weekly. So the $300 that I allocate for my variable expenses are for two weeks.

Question Two: Do you track your spending?
I have found that tracking wasn't as important for me as it is for some folks. I didn't get a lot of value from it. What I mean to say is that I allocate $100 for two weeks worth of groceries. I know where that money has gone - it's gone to food. I don't need to track how much went to bread/butter/or other items relating to groceries.

Some other details about how I manage my 'jars'

• I keep any 'left over' jar money - and roll it over into the following weeks. That way, If something comes on sale and I want to bulk up, I have the $$ for it already.
• Some people have commented before that my entertainment budget looks a little high. I would argue that it's not.  
• 'entertainment' is a very broad category for me.  For example, last month I bough some Halloween decorations for the house, I took money from my entertainment fund for that. Entertainment may also includes any trips home I make and extra gas money to visit my horse, and a variety of other item's that may come up. I could increase my Transportation budget and decrease my entertainment budget - but having it set up the way it is allows for more flexibility.
• I recently decreased my clothing/gifts jar because I have a dedicated Christmas/Gift account where I save separately, so I shifted some of those funds to my 'everything else' jar.
• Jordan also contributes to the food jar. We are both paid bi-weekly but on opposite weeks. He deposits $100/bi-weekly as well.
• I should also mention that our grocery/food budget also includes joint personal care items like razer blades and cleaning supples. I would buy my personal make up and other items from my 'other ' jar.

I hope that answers Jason's questions, and addresses any one else's' if their out there. Feel free to ask more :)

Magic Jars Update

I didn't post my bi-weekly budget last pay period because I had all sorts of financial stanfu's happen, culminating with my roomate paying rent four days late.  I am still using the jars and have about $40 left until next Friday. 

I'm not sure if I mentioned it or not yet but Jordan decided to use the food jar with me.  This will be his second pay period using a joint food jar with me.  He put $100 towards groceries this past Thursday.  I so love that he's on board with this!  We had talked about it last month and at first he was hesitant but I asked him to think about it - and he decided to go for it. 

I *think* that he likes knowing that he puts his $100 in, and so do I, and that's it.  Like a bill we created for ourselves.

I feel like thinks are really coming together on this front.  Although I am slightly panicky about what to do with my money now that the credit card is paid off.  I set my goals, and will work towards them - but for some reason I feel uneasy about it.

I am credit card debt free!

...that's right, I am finallly

credit card debt free!

wow.

I'm not sure I believed this day would actually come! I feel like in some way or another I have owed money on my credit card for the last five years or so. I've come very close to paying it off a few times, and then promptly plummeted right back into debt. I even cashed out a few RRSP's a couple years ago to try to pay it off.

My CC debt has never felt insurmountable, and has always felt insurmountable all at the same time. At it's worst it always ranged from $3,500 - $5000. I think that the relatively small sum made me feel even worse that I couldn't get it paid off. I would often wind up criticizing myself because, come on?! What's wrong with me?! Why don't you just do it!

I could blame the length of time on any number of factors, but I'm not going to go down that route. Instead, I'll tell you what I did that worked.

1. I had to make the decision that eliminating this debt was important to me!

It had to be more important then a haircut (which I haven't had in probably a year and a half), more important then new shoes, new work clothes, or a new couch (to name a few).

2. I put myself on a budget, and stuck to it.

I used Gail Vaz-Oxlade's 'magic jars' to get me on track. Living on cash really worked for me, although at first made me very uncomfortable. I had only to remind myself of point number one before I got over it. I put $250/bi-weekly towards my credit card debt while continue to save in my RRSP's and emergency fund.

3. I built a $1000 emergency fund

Once my credit card debt was in reach, I used the majority of that emergency fund to pay of my debt. I was wayy over my head with it, and truly needed it to be gone. It was my emergency! I am now working to build that fund back up.

4. I cut up my credit card!

I tried leaving it at home, leaving it with Jordan - I even wrapped it in paper with awful messages to myself reminding me that I wanted my credit card debt paid off. The only thing that got me to break the habit of using it, was to remove it from the equation. I had used my emergency fund to pay off this debt, and the only way to not regret that decision was to cut it up the card.

Not using the credit card finally enabled me to be able to have my debt repayments do their job and - repay that debt!

Thank you for following me through this first step towards financial freedom. Going forward in the short term I plan to get my emergency fund back up to at least $1000 and have a debt free Christmas. Come January I plan to focus on eliminating my student loan debt. I look forward to continuing this journey with all of you.

Coversations about Money

So I just had the coolest conversation with my boss, ever!

He uses the Jars.

He made a comment about my open toe shoes, which we are not allowed to wear at work because it’s a health & safety concern. I said something about ‘it’s not in the budget this month’ but that I would work it in soon.

That little tidbit of sharing had him launching into what he and his wife do to manage their finances.

He said that he and wife have used the mason jars for a great number of years. They’ve since moved on to just tracking their expenses via an excel spreadsheet, but the principals are the same. They weren’t in crazy debt – and the reason for that, is they have always managed their money, tracked their spending, had goals – and met them!

I told him that I had actually just started on the ‘magic jars’ (he hadn’t heard of Gail Vaz Oxlade!), last pay day, and so far so good!

He said the great benefit, is when both you and your partner (*cough *cough, Jordan) are on the same page with them. He also said, make sure you’ve got a bit of fun money in there too!

It just felt good to know someone else who uses them, and who it works for (b/c TV people aren’t real?... )

Quick Update - Magic Jars are a go

I set up my jars tonight, I only had $110 in cash on me (such a rarity), so I'll have to stop at the bank tomorrow after work to pick up the remaining $195 to top up my jars for the full two week allotment. I think this will work better then drawing out the funds each week. This way, after i take out the $$, there should be no need for either debit or credit until next pay day (that's the theory, right Gail?)

Budgets & Jars

I was cleaning out the pantry a bit last night and noticed that my brother and lindsay had quite a few mason jars that wern't being used. Seeing as buying jars is what stopped me from using Gail's Jar System last time I thought about - I don't really have an exuse now.

I worked through her online budget last night, and customized it quite a bit for my own needs - trying to make sure I hit everything that is in my current budget.

This is what I wind up with using Gail's budget (slightly modified):

I'm pretttty sure that I'm not forgetting anything,

but I kind of feel like I am. Perhaps this is really my heart saying - you promised you would stop mucking about with your budgets and just let them work.

This month has been a little crazy for $ and Jordan and I have done quite a bit of flip flopping back and forth - which has made it challenging to stick to much of anything - with 5 birthdays and a couple of camping trips and I'd say the budget or the system needs to be looked at.

Below, is a summary for each category - You can see that acccording to Gail - I'm over or underspending in some of her s/b columns.

Feel free to chip in and let me know if you think I under or over estimated in any categories

Now - the spreadsheet goes one part further - and tells you how much $$ you should put in the jars each week/month. Here is that break down:

So my variable spending for the month is $635/month, or aabout $150/week.

So - What do you think, should I go for it? Have I left anything out?

Not your typical "Jars"

I went home for Easter and spent some time walking & talking with my mom. I was feeling very overwhelmed with money and needed to vent. Above and beyond all my other ins and outs in terms of cash flow I'm also the point of money flow for myself and my three other roomates. So I get three rent checks a month and three utilites checks a month. Rent comes on generally in the first week but our landlord doesn't always deposit the rent money on the first and utilies are spread out throughout the month. So I basically have these huge influxes of money coming in and out. And although the utilities come out very regularly (everything is on automatic withdrawls) it's not always the same date - so hard to plan for.

I told my mom that I have about $150/week for my variable expenses (groceries, some planned spending categories, restaurants, and personal items). I'm not comfortable carrying that much cash around in my pocket, and with so many roomates I don't want jars of money laying around. On top of that - i've been getting zinged with bank fees (that were not planned for).

So after all that - we came up with a plan. I called ING and opened another savings account with them, but one that has a debit card (which I am currently waiting to receive). Every pay period I will automatically 'pay myself first' and $300 goes into that account. This way, I can use this new account for all of my day to day, variable, ins and outs. I will write it down and track it so I know where the $$ is going.

This will resolve my almost nerotic (my boyfriend J would say 100% nerotic) behaviour of checing my banking information every day at least twice a day - doing math in my head trying to figure out how much money I have, how much is already allocated somewhere else (like rent or utilties) and how much is mine.

So. I have one 'magic jar' (any gail fans will know what i'm taking about) which will be a no-fee savings account with debit card access. I should be able to carve up my credit card and debit card for my primary accounts where I have huge in's and outs. I'm going to give it 4 weeks before I do that - just in case I missed something.

This is my new plan. I hope it works.

Managing your money...

I am a big fan of Gail Vaz Ozlade, and her show 'till debt do us part. One of the ways she encourages people to manage there money is to use her 'majic jar system'. Once the budget has been made, you can divide your variable expenses so that you have weekly amounts you can spend. She uses jars so people can see their money coming in and going. You also need a notebook to track every sent that you spend - it doesn't work unless you track it.

so using gails budgeting tools to help figure out my weekly amounts ( I used the budget numbers I posted preivously, but entered them into her spreadsheet. I also customized the sheet a bit to meet my needs - this is pretty easy if you are familiar at all with excel).

Below is a picture of the jar amounts I'm going to start using. I get paid next week, so I will start my jar system that week. This week, I will find the jars (going to try not to buy them) and a notebook to get organized.

I have hidden some of the fields, b/c I am not comfortable posting exactly how much I make. That said, if anyone needs help creating a sheet like this for themselves, I would be more than happy to send you something.